Speaking on his first earnings call since taking the helm of the Montreal-based clothing manufacturer from his ousted predecessor in January, Vince Tyra had early thoughts about changes he may make but shared few specifics. 

He said he would like to make unspecified "tweaks and enhancements" to the company's American Apparel and Comfort Colors brands and focus more on expanding the ring-spun fleece part of Gildan's business.

"But in terms of nailing down the long-term strategy, I think that'll come as 2024 develops," Tyra said Wednesday.

Analysts and shareholders have been waiting for Tyra to outline his vision for the company, which has been dogged by controversy since his arrival.

Gildan has been embroiled in a fight over who should lead the company since it announced late last year that co-founder and then-CEO Glenn Chamandy would be replaced by Tyra. Several Gildan shareholders, led by U.S. investment firm Browning West, have sought to have Chamandy reinstated in what has been an ugly battle for control.

Browning West has been trying to replace a majority of the Gildan board of directors in a move to bring Chamandy back. The U.S. investor, which has the support of Gildan's largest shareholder Jarislowsky Fraser, has said it will offer a slate of candidates for election at the company's forthcoming annual meeting.

The Gildan board has said it replaced Chamandy because he had no credible long-term strategy for the company and had lost the board's trust and confidence in his ability to grow an increasingly complex organization.

In response, Chamandy has said he presented a comprehensive long-range plan in October that showed meaningful organic growth prospects for Gildan over the next five years.

Tyra did not reference the strife on Wednesday's call and when analysts queued to ask questions, they were told to limit their queries to the company's guidance and fourth-quarter results.

Just before the call, Gildan announced that it had raised its quarterly dividend 10 per cent as it reported a fourth-quarter profit of US$153.3 million, up from US$83.9 million a year earlier.

The clothing maker said it would pay a quarterly dividend of 20.5 cents US per share, up from 18.6 cents US per share.

Gildan, which keeps its books in U.S. dollars, said its fourth-quarter profit amounted to 89 cents US per diluted share for the quarter ended Dec. 31, up from 47 cents US per diluted share a year earlier.

Net sales totalled US$782.7 million, up from US$720.0 million.

On an adjusted basis, Gildan says it earned 75 cents US per diluted share, up from an adjusted profit of 65 cents US per diluted share a year earlier.

Tyra said 2023 was "a year of strong progress" for Gildan, which he said came "despite an overall challenging macroeconomic backdrop."

Canadian companies have seen consumers cut back on purchases to cope with high inflation, curtailing the spending trends usually seen as the country closes out the year.

Executives, who joined Tyra on Gildan's call, said the company had also seen inflation change when people are buying their products. Many customers have now moved to placing orders closer to when they need merchandise, encouraging the company to manage their inventory and its replenishment "more tightly."

Their remarks pushed Gildan's share price up by almost five per cent or $2.28 to $48.06 in morning trading.

Moving forward, Gildan said it expects revenue growth for 2024 to be flat to up low-single digits.

The company's adjusted diluted earnings per share for 2024 are expected to be in a range of $2.92 to $3.07, up between 13.5 per cent and 19.5 per cent year over year.

Gildan is also anticipating the expiry of its licensing agreement with sportswear giant Under Armour in March, but said it will have a minimal impact on profitability.

Desjardins analyst Chris Li saw the outlook as "solid," but warned in a note to investors that he thinks "macro uncertainties remain the biggest risk for Gildan." 

— With files from Craig Wong in Ottawa

This report by The Canadian Press was first published Feb. 21, 2024.

Companies in this story: (TSX:GIL)

Sponsored

Trade Smarter, Today

With CIBC Investor's Edge, kick-start your portfolio with 100 free trades and up to $4,500 cash back.

About the Author

The Canadian Press

The Canadian Press

News agency

The Canadian Press is a national wire service that provides real-time stories for more than 600 media companies.

What to Read Next